Betting odds for the UK making a Brexit are going crazy — but they may not be accurate

Betting on Brexit has reached World Cup proportions, with
Ladbrokes telling Business Insider it has recorded over 10,000
individual bets on a Vote Leave and odds for a Brexit across all
bookmakers on a knife-edge.

Graham Sharpe, William Hill's Director of Media Relations, said
the betting market for the referendum was incredibly "volatile,"
adding it had "changed three times already this morning."
Ladbrokes and other bookmakers have repeatedly slashed their
Brexit odds in the last week.

But onlookers should remember that betting odds can be a poor
indicator of which way a referendum will go on the day.

In a Brexit note released today, HSBC warns that despite voting
polls and betting odds now moving in Leave's favour, "poll
volatility ahead of a vote is not uncommon" (emphasis ours):

A week or so before the Scottish independence referendum in 2014
polls started to suggest a vote for
independence. This rattled both politicians and markets
but in the end there was a healthy margin to
stay in the UK. With a week to go, the result is still
highly uncertain.

Odds are directly informed by voting polls because punters use
that information to bet on what they think will happen. But
here's a look at polling a week before the Scottish Independence
referendum, which shows a consistent trend upwards for the
independent vote in red:

When it came to the results, "No" voters won comfortably. Going
by this, HSBC says there is still time for things to go back in
Remain's favour:

One week before the Scottish independence referendum in 2014
polls started to suggest a vote for independence. This rattled
both politicians and markets. In the end there was a healthy
margin to stay in the UK (55.3% vs 44.7%).

It added that a high turnout would also favour an In vote, saying
it would "indicate more involvement from younger voters, who are
thought more likely to vote to remain."

But it does admit the difference in Brexit's case could be the
number of reputable polls which show Leave's dominance compared
to Scotland's situation:

There were only a couple of reputable polls indicating a vote for
Scottish independence in the weeks before the vote and before
them the margin for staying in the UK had been healthy. By
contrast, the EU referendum polls have consistently shown a very
close race.

Here's a quick look at the current Leave odds from the major
bookmakers:

Ladbrokes — 11/8

William Hill — 11/8

Coral — 11/8

Sky Bet — 6/5

Paddy Power — 5/4

Betfair — 5/4

Betfred — 5/4

Whichever way the vote goes,
the level of interest from gamblers has been
unprecedented.

Brexit betting has now become
the biggest market for any UK political event ever, with the
number of bets reaching football World Cup proportions. Over
£30 million ($42 million) has been bet in the referendum market
so far, compared to £35 million bet on the 2014 World
Cup.